Borrowing capacity: what lenders actually look at

Every lender starts with the same question: can you comfortably service this loan, today and if rates rise? They answer it by assessing your verified income against your living expenses, existing debts and a buffer — typically around 3% above the actual rate.

Income isn't just salary. Lenders weight overtime, bonuses, rental income and self-employed earnings differently, and some shade them heavily. Two borrowers on the same package can see very different outcomes at different banks.

Expenses and existing commitments matter just as much. Credit card limits — even unused ones — reduce capacity, as do car loans, HECS and dependants. Cleaning up limits and debts before you apply can move the number materially.

Finally, structure changes the answer. The entity you borrow in, the lender order across a portfolio, and how existing properties are cross-collateralised all affect what the next application looks like. That's why we map capacity before you start searching.